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Universal life (UL) can help clients respond to changing personal goals and market conditions more quickly, giving them flexibility and choice.


Myth #1: it’s complicated

You can help clients design their policies to be straightforward. UL offers clients transparency and choice.

UL was created to show clients the details of the insurance and the investment components of their policies. The cost of insurance (COI), management fees, premium tax and investment returns are all disclosed. Clients have control over their payments to the policy, including how much goes to the investment component and how they want to invest* these funds.

UL can be ideal for the hands-on client who wants to see all the details, manage their own investments, and wants more flexibility.

Myth #2: ul doesn’t have guarantees

Today’s UL plans do offer guarantees:

  • Monthly COI rates are guaranteed for the initial insurance amount.
  • Some plans offer guaranteed paid-up COI options.
  • Clients can get guaranteed rates of return on select investment account options, such as the Guaranteed Interest Account (GIA).
  • Limited pay COI options offer guaranteed cash values.

With all of the flexibility clients get with UL, such as selecting the amount they want to pay, clients need to ensure their fund value, any interest earned and any payments they’re making are enough to keep paying for the policy costs each year.

Myth #3: UL is risky

UL isn’t for everyone, but it may be the right fit for clients who want to take control of their life insurance and can be presented to them for their consideration. With UL, they’ll have a lot more flexibility and choice to design their own coverage.

With more choice and flexibility comes a little bit more risk — but in exchange, clients benefit from:

  • The opportunity to adjust their payments to meet their cash flows, provided minimum policy costs are met.
  • The ability to choose the investment account options they’re comfortable with, allowing them to design their own portfolio to meet their individual risk tolerance.

Myth #4: Advisors need to be cautious when it comes to UL

As a trusted advisor, your clients look to you for help in building their financial future. Offering UL requires more of what you’re probably already doing – staying connected with your clients.

  • When you’re working with a client to design a UL policy, make sure you show them not only the interest rate they believe they can get, but also one that is more realistic for the times. For example, if the client believes the portfolio they’ve selected will earn 8%, show them an alternate interest rate of 2% to 3%, so the client can see what can happen if they don’t earn what they expect.
  • Review the policy’s performance with the client every year. This gives you the opportunity to see how the policy is performing and make adjustments as needed. UL offers flexibility to change investment account options, and even COI options.
  • Stay informed about changes in your client’s life. This can be accomplished during an annual review and also gives you the opportunity to go over any new financial planning needs they might have.

Consider the benefits of UL. Read the Get back to the basics – the fundamentals of UL article to learn more about which of your clients could benefit from its features.

The truth about UL

Universal life insurance can be a great solution for clients who want:

  • Payment flexibility – clients can make additional payments (within limits) to the policy fund for additional tax-preferred savings growth, and they can start or stop payments anytime.
  • Investment options – clients can select investment account options that match their risk tolerance, and they can change their options as their needs change – with no additional costs.
  • Choice – clients can tailor their plan to their needs. For example, SunUniversalLife II offers five different death benefit options, and six COI options.

Take a closer look at universal life insurance

Use this guide to help you determine the best UL solution for your clients or contact .

*Clients don’t purchase any units or have any legal interest in the underlying investment fund or individual investments.

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